02/02/2022 05:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB131 | |
| SB11 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 131 | TELECONFERENCED | |
| + | SB 11 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 2, 2022
5:22 p.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair (via teleconference)
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage
Representative Liz Snyder (via teleconference)
Representative David Nelson
Representative James Kaufman
Representative Ken McCarty
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 131(TITLE AM)
"An Act relating to the presumption of compensability for a
disability resulting from certain cancers in firefighters."
- HEARD & HELD
CS FOR SENATE BILL NO. 11(JUD)
"An Act relating to community property and to community property
trusts; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 131
SHORT TITLE: WORKERS' COMP DISABILITY FOR FIREFIGHTER
SPONSOR(s): SENATOR(s) HOLLAND
04/28/21 (S) READ THE FIRST TIME - REFERRALS
04/28/21 (S) CRA, L&C
05/06/21 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
05/06/21 (S) Heard & Held
05/06/21 (S) MINUTE(CRA)
05/11/21 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
05/11/21 (S) -- MEETING CANCELED --
05/13/21 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
05/13/21 (S) Moved SB 131 Out of Committee
05/13/21 (S) MINUTE(CRA)
05/14/21 (S) CRA RPT 2DP 2NR
05/14/21 (S) DP: HUGHES, GRAY-JACKSON
05/14/21 (S) NR: MYERS, WILSON
05/14/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/14/21 (S) Moved SB 131 Out of Committee
05/14/21 (S) MINUTE(L&C)
05/17/21 (S) L&C RPT 4DP
05/17/21 (S) DP: COSTELLO, MICCICHE, GRAY-JACKSON,
STEVENS
05/18/21 (S) TRANSMITTED TO (H)
05/18/21 (S) VERSION: SB 131(TITLE AM)
05/19/21 (H) READ THE FIRST TIME - REFERRALS
05/19/21 (H) L&C
02/02/22 (H) L&C AT 5:15 PM BARNES 124
BILL: SB 11
SHORT TITLE: COMMUNITY PROPERTY TRUSTS
SPONSOR(s): SENATOR(s) BEGICH
01/22/21 (S) PREFILE RELEASED 1/8/21
01/22/21 (S) READ THE FIRST TIME - REFERRALS
01/22/21 (S) L&C, JUD
03/10/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/10/21 (S) -- MEETING CANCELED --
03/12/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/12/21 (S) Heard & Held
03/12/21 (S) MINUTE(L&C)
03/19/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/19/21 (S) Moved SB 11 Out of Committee
03/19/21 (S) MINUTE(L&C)
03/22/21 (S) L&C RPT 4DP
03/22/21 (S) DP: COSTELLO, GRAY-JACKSON, STEVENS,
HOLLAND
05/05/21 (S) JUD AT 1:30 PM BUTROVICH 205
05/05/21 (S) Heard & Held
05/05/21 (S) MINUTE(JUD)
05/10/21 (S) JUD AT 1:30 PM BUTROVICH 205
05/10/21 (S) Moved CSSB 11(JUD) Out of Committee
05/10/21 (S) MINUTE(JUD)
05/11/21 (S) JUD RPT CS 3DP 2NR SAME TITLE
05/11/21 (S) DP: HOLLAND, HUGHES, KIEHL
05/11/21 (S) NR: MYERS, SHOWER
05/17/21 (S) TRANSMITTED TO (H)
05/17/21 (S) VERSION: CSSB 11(JUD)
05/18/21 (H) READ THE FIRST TIME - REFERRALS
05/18/21 (H) L&C, JUD
02/02/22 (H) L&C AT 5:15 PM BARNES 124
WITNESS REGISTER
SENATOR ROGER HOLLAND
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, discussed SB 131(TITLE
AM) via a PowerPoint presentation, "Senate Bill 131 WORKERS'
COMPENSATION DISABILITY FOR FIREFIGHTERS."
NIKKI ROSE, Chief of Staff
Senator Roger Holland
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Senator Holland, prime sponsor
of SB 131(TITLE AM), provided the sponsor statement and a
sectional analysis of the bill.
JUSTIN MACK, Southcentral Vice President
Alaska Professional Firefighters Association
Anchorage, Alaska
POSITION STATEMENT: During the hearing on SB 131(TITLE AM),
provided invited testimony in support of the bill.
SENATOR TOM BEGICH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As the prime sponsor of CSSB 11(JUD),
discussed the history behind, and provisions of, the bill.
TREVOR BAILLY, Staff
Senator Tom Begich
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided the sponsor statement and
sectional analysis for CSSB 11(JUD) on behalf of Senator Begich,
prime sponsor of the bill.
MATTHEW BLATTMACHR, President and CEO
Peak Trust Company
Anchorage, Alaska
POSITION STATEMENT: Provided invited testimony in support of
CSSB 11(JUD).
ABIGAIL O'CONNOR, Attorney
O'Connor Law LLC
Alaska Trust & Estate Professionals Inc. (ATEP)
Anchorage, Alaska
POSITION STATEMENT: Provided invited testimony in support of
CSSB 11(JUD).
ACTION NARRATIVE
5:22:30 PM
CO-CHAIR IVY SPOHNHOLZ called the House Labor and Commerce
Standing Committee meeting to order at 5:22 p.m.
Representatives Kaufman, McCarty, Fields (via teleconference),
Snyder (via teleconference), Nelson, and Spohnholz were present
at the call to order. Representative Schrage arrived as the
meeting was in progress.
SB 131-WORKERS' COMP DISABILITY FOR FIREFIGHTER
5:23:15 PM
CHAIR SPOHNHOLZ announced that first order of business would be
SENATE BILL NO. 131(TITLE AM), "An Act relating to the
presumption of compensability for a disability resulting from
certain cancers in firefighters."
CO-CHAIR SPOHNHOLZ reminded members that SB 131(TITLE AM) is
similar to Representative Kaufman's bill [HB 204, which was
reported from the committee on 5/17/21].
5:24:09 PM
SENATOR ROGER HOLLAND, Alaska State Legislature, as prime
sponsor of SB 131(TITLE AM), stated that the subject of breast
cancer coverage for fire service members initially struck him as
a complicated topic, but the more he looked at the subject the
simpler the argument became. He said he hopes to convey what a
clear and justified request this is.
5:25:03 PM
NIKKI ROSE, Chief of Staff, Senator Roger Holland, Alaska State
Legislature, on behalf of Senator Holland, prime sponsor of SB
131(TITLE AM), provided the sponsor statement and a sectional
analysis of the bill. She paraphrased from the sponsor
statement, which read [original punctuation provided with some
formatting changes]:
Firefighting is an inherently dangerous job. It is
important that workers compensation insurance provides
coverage for the inherent risks in that job, but right
now there is a hole in that coverage: breast cancer.
This bill would add breast cancer to the list of
presumed disability coverages for firefighters, so
long as the firefighter could establish medically that
the breast cancer was caused by work as a firefighter.
Instances of cancer in firefighters is shown to be
higher than the general population. Studies that have
evaluated cancer risk among women firefighters suggest
women firefighters, like their male coworkers, may be
at an elevated risk for overall cancer incidence
(Daniels et al., 2014). These studies also suggest
women firefighters may be at an elevated incidence
risk for breast cancer (Daniels et al., 2014). This
bill protects not only women, because exposure to
carcinogenic chemicals, which is sometimes necessary
in the course of a firefighter's job, does not
discriminate based on sex or gender. Exposure to
these chemicals may be mitigated, but not eliminated,
through protective equipment. Firefighters are at a
higher risk of cancer, and this risk should be
covered.
Thank you for your consideration of the addition of
breast cancer to the list of presumed disability
coverages for firefighters.
5:26:36 PM
CO-CHAIR SPOHNHOLZ noted that men can get breast cancer as well
as women.
5:26:48 PM
MS. ROSE provided the sectional analysis of SB 131(TITLE AM).
She said the bill relates to the presumption of compensability
for disabilities resulting from certain diseases for
firefighters. She explained that Section 1 of the bill amends
AS 23.30.121(b) by adding the term "breast cancer" to the list
of cancers. Section 2 of the bill clarifies this change applies
to claims made on or after the effective date of this Act.
5:27:45 PM
SENATOR HOLLAND thanked the co-chair for reminding members that
breast cancer is not limited to women, which is what makes this
an easy argument. He pointed out that women make up about 4
percent of the fire service workforce in Alaska, so it is hard
to make a statistical decision on whether breast cancer coverage
would be justified. But, he continued, male firefighters are
7.5 times more likely to die of breast cancer than their male
counterparts not in the fire service.
SENATOR HOLLAND began a PowerPoint presentation, "Senate Bill
131 WORKERS' COMPENSATION DISABILITY FOR FIREFIGHTERS." He
displayed slide 2, "SB 131," and stated that firefighting is an
inherently dangerous job and currently there is an oversight [in
Alaska statutes] regarding [workers compensation insurance
coverage] for breast cancer. He moved to slide 3, "Senate Bill
131," and said the bill would add breast cancer to the list of
presumed disability coverages. He turned to slide 4 and related
that instances of cancer in firefighters are higher than that of
the general public, which is why there is a list of presumed
disability coverages. Studies suggest women firefighters may
also be at an elevated incidence of risk for breast cancer.
SENATOR HOLLAND addressed slides 5 and 6, "General Statistics."
Paraphrasing from slide 5, he specified that in the general
population, less than one percent of males are likely to develop
breast cancer in their lifetime, yet male firefighters are 7.5
times more likely to die from breast cancer than their non-fire
service counterparts. The same mechanism that would cause
increases in breast cancer in men is thought to result in
proportional increases in risk among women. Paraphrasing from
slide 6, he further specified that in the general population,
one in eight women (12 percent) will likely contract breast
cancer in their lifetime. The bill protects not only women,
because exposure to carcinogenic chemicals, which often occurs
in the normal course of a firefighter's job, does not
discriminate based on gender.
SENATOR HOLLAND continued to slides 7 and 8, "Presumptive Laws."
Speaking from slide 7, he explained that presumptive laws are
regulations that assume a given disease is linked, by default,
to a specific occupation. This means that when someone is
diagnosed with an illness covered under a presumptive law, he or
she is automatically entitled to disability or workers'
compensation, medical expense coverage, and medical leave,
provided certain criteria are met. Speaking from slide 8, he
further explained that without presumptive laws, to get these
benefits firefighters and other workers may have to prove that
their line of work caused their disease.
SENATOR HOLLAND reviewed slide 9, "Alaska Statute 23.30.121."
He pointed out that under SB 131(TITLE AM), breast cancer would
join the current list of presumptive diseases for firefighting
in Alaska, which includes: respiratory disease, cardiovascular
events, primary brain cancer, malignant melanoma, non-Hodgkin's
lymphoma, bladder cancer, ureter cancer, kidney cancer, and
prostate cancer.
SENATOR HOLLAND displayed slide 10, "Presumptive Laws." He
continued to slides 11 and 12, "Alaska Statute 23.30.121," and
said more work may need to be done in this area. Speaking to
slide 11, he explained that once breast cancer is added to the
list of presumptive diseases, several criteria [standard
limitations] would apply. The firefighter must: 1) have been a
firefighter for at least seven years; 2) have had initial and
annual medical exams showing no evidence of disease for those
seven years; 3) be able to demonstrate exposure to a known
carcinogen while in the fire service; and 4) at a minimum, be
certified as a Firefighter I. Speaking to slide 12, he outlined
the other qualifying criteria or conflicts that would apply. He
said coverage may be denied based on use of tobacco products;
physical fitness and weight, lifestyle decisions, hereditary
factors, [and exposure from other employment/non-employment
activities]. Some post-employment coverage is available where a
firefighter accrues three months of coverage for every year of
service up to a five-year maximum.
SENATOR HOLLAND showed slide 13, "Senate Bill 131," and noted
that 14 states include breast cancer in presumptive laws:
Arizona, Arkansas, Colorado, Idaho, Iowa, Maine, Maryland,
Missouri, Montana, New Mexico, New York, Oregon, Virginia, and
Wisconsin. He said he would appreciate the committee adding
Alaska as the fifteenth state.
5:32:01 PM
CO-CHAIR FIELDS thanked the sponsors of the companion bills. He
said it is a reality that cancer is more likely for
firefighters, and it should be recognized given their service.
5:32:40 PM
REPRESENTATIVE NELSON noted that the bill has a zero fiscal note
because this is workers' compensative coverage that firefighters
pay for themselves.
5:33:20 PM
CO-CHAIR SPOHNHOLZ opened invited testimony.
5:33:43 PM
JUSTIN MACK, Southcentral Vice President, Alaska Professional
Firefighters Association, provided invited testimony in support
of SB 131(TITLE AM). He noted that the Alaska Professional
Firefighters Association represents about 500 fire and emergency
medical service (EMS) professionals. He said he has worked for
the Anchorage Fire Department for 10 years and currently serves
as a captain and as state director for the firefighter cancer
support network, a peer-to-peer cancer support program.
MR. MACK stated that a firefighter's job is routine until it
isn't. The tones go off at 2:00 a.m. and minutes later
firefighters find themselves in a building they've never been in
with heavy smoke, fire, and zero visibility. The calls are
routine until the report of multiple victims trapped in a multi-
family structure, and the firefighters are the difference in
whether the victims will see another day. While these calls are
anything but routine, it is the career a firefighter has chosen
and loves to do. All firefighters know that this career can be
dangerous, it simply isn't safe to walk into a burning building.
MR. MACK related that early in his career he learned that good
training and tactics can help keep a firefighter safe. What he
failed to understand, however, is that no matter how careful he
is as a firefighter, even if he follows every standard operating
guideline, decontaminates himself and his equipment, and wears
the most up-to-date personal protection equipment (PPE), he will
be exposed to some of the worst chemicals on earth. These
chemicals permeate a firefighter's gear, make their way into the
firefighter's pores, and then linger. This is the reason that
after a significant structure fire firefighters will for days
smell it on themselves after a shower as their pores open up and
start to release some of those chemicals.
MR. MACK explained that Alaska's workers' compensation usually
requires that a specific injury be tied to a specific event. In
a case of cancer, it's very hard to say which structure fire may
have caused the cancer, but study after study shows that
firefighters have a significant increase in cancer rates when
compared to the general public. An unusual phenomenon occurs in
the fire service firefighters come there as some of the
healthiest amongst the population but often retire as some of
the unhealthiest. Twenty to thirty years at this job takes a
toll and for some that's a life changing cancer diagnosis.
MR. MACK said SB 131(TITLE AM) is a step in the right direction
in advocating for public safety members who, while knowing the
risk, continue to respond at 2:00 a.m. He urged the committee
to support the bill.
5:36:42 PM
REPRESENTATIVE MCCARTY asked whether Mr. Mack believes that
language should be included in the bill about a documentation
procedure for verifying exposure to a carcinogen. That way, he
continued, documentation about carcinogen exposure would already
be in place should a firefighter be diagnosed with cancer.
MR. MACK replied that reporting is done for every run done by a
firefighter. Specifically for structure fires, he said, there
is an inherent understanding of a long list of chemicals that a
firefighter could reasonably expect to have been exposed. The
issue that states often run into with workers' compensation is
this language of tying it to one specific event, he advised.
Presumptive takes a firefighter's career and his or her
reporting documentation so a reasonable assumption can be made
that this person got cancer at a younger age or a very rare type
of cancer. This is a personal issue, Mr. Mack continued, as his
mother-in-law developed a rare blood cancer after 25 years of
being a firefighter. She was one of the first people to go
through some of this presumptive fight and the documentation of
the call volume that she had over 25 years was helpful. The
presumptive legislation and just making the assumption is what
was especially beneficial in getting her covered through
workers' compensation.
5:39:39 PM
CO-CHAIR SPOHNHOLZ inquired about the types of carcinogens that
are commonly known to be present in a typical structure fire.
MR. MACK said he would send the committee a comprehensive list
of the [chemicals] that firefighters are reasonably expected to
be exposed to, as well as the ones it is thought that
firefighters are exposed to. For each chemical the list will
also state the household items that the chemical is found in and
the type(s) of cancers specifically that those relate to.
5:40:27 PM
REPRESENTATIVE NELSON, regarding documentation, asked whether it
is assumed that when responding to a house or other structure
fire a firefighter is going to be exposed to certain chemicals
or whether a test is done afterwards to determine exposure.
MR. MACK replied it is assumed and that testing is not typically
done. However, he continued, several studies have been done.
One study, which he said he would provide to the committee, put
a firefighter through a structure fire while using all the up-
to-date PPE and decontamination procedures. Urinary testing was
then done for the week following that structure fire and
significant amounts of carcinogens were found in decreasing
amounts over five to seven days. As well, carcinogens were
found on the skin for a couple days.
REPRESENTATIVE NELSON asked whether contamination on the skin is
a problem that is related to the equipment or decontamination,
or that over 25 years a firefighter is going to have it.
MR. MACK replied that some of these carcinogens permeate through
the multiple layers of gear, plus for every one degree increase
in body temperature there is a 400 percent increase in pore size
and absorption. When operating in a structure fire of 500-1000
degrees, a firefighter's body temperature gets elevated and skin
pores open, and this is when these carcinogens are in the air
and going directly through the firefighter's gear and directly
into his or her pores. Firefighters are aware that this exists
and that even with significant improvements in PPE it is still a
risk. But if there is a fire in a house or a rescue that needs
to be done, firefighters are going to go in and do it.
5:44:04 PM
CO-CHAIR SPOHNHOLZ remarked that there are limits to modern
technology's ability to protect a person from smoke and
chemicals. The evidence on this matter is substantial, she
continued, as male firefighters are 7.5 times more likely and
female firefighters 4 times more likely to get breast cancer
than males and females in the general population. She offered
her appreciation to the sponsor for bringing forth the bill.
CO-CHAIR SPOHNHOLZ announced that SB 131 was held over.
SB 11-COMMUNITY PROPERTY TRUSTS
5:45:25 PM
CO-CHAIR SPOHNHOLZ announced that the final order of business
would be COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 11(JUD), "An
Act relating to community property and to community property
trusts; and providing for an effective date."
5:45:51 PM
SENATOR TOM BEGICH, Alaska State Legislature, as the prime
sponsor of CSSB 11(JUD), recounted that major legislation on
trusts was signed into law in 1997, and that soon afterward,
House Bill 199 by Representative Joe Ryan was passed, which
provided that a couple can opt to put their assets into a
community trust. Representative Ryan testified at the time that
a positive element of House Bill 199 was that on behalf of the
estate of a person in a community trust who has died, there
would be no tax liability on any appreciation in the basis (the
value of an asset at the time of purchase). Representative
Ryan's testimony indicated that appreciation of the asset was
critical in what he was trying to do. The intent in 1997 was
that if a married couple put assets into a community trust and
then 25 years later one dies before the other, the value of the
assets in that community trust would include the appreciation as
one of those assets.
SENATOR BEGICH explained, however, that a recent court decision
created ambiguity about that intent when the decision indicated
that the value of the asset was the value at the time of the
community trust as opposed to being the value of the asset
accrued over time. He said CSSB 11(JUD) clarifies that the
income and appreciation combined is what was intended by the
author of the original bill; if enacted, it incorporates those
elements of the Uniform Marital Property Act that were already
said would be incorporated. It is an elect an option, it is not
mandatory like some of the community property states. To not
create constitutional issues with retroactivity, CSSB 11(JUD)
includes a savings clause, thereby effectively reminding people
what the meaning was back when the law passed. The bill is
designed such that it would not affect any litigation that may
be pending, or any litigation entered prior to CSSB 11(JUD)
becoming law. The bill fixes a mistake in interpretation. When
there is an ambiguity in any interpretation, the court often
looks to the legislature to correct or clarify that ambiguity,
which is what CSSB 11(JUD) does.
5:50:28 PM
TREVOR BAILLY, Staff, Senator Tom Begich, Alaska State
Legislature, provided the sponsor statement and sectional
analysis for CSSB 11(JUD) on behalf of Senator Begich, prime
sponsor of the bill. He paraphrased from the sponsor statement,
which read [original punctuation provided]:
Alaska is a state with favorable trust laws and
favorable laws for property ownership between spouses.
Alaska allows for "opt in" community property
ownership between married spouses. Community property
ownership can provide tremendous tax advantages to
spouses. In Alaska, residents can enter into community
property agreements, and residents and nonresidents
can enter into Alaska community property trusts. This
benefits the individuals entering these agreements,
the trust industry of Alaska, increases deposits in
Alaska banks and through the revenue generated by the
formation of a new trust, the state.
Community property is simply a way to own joint
property. A common way to enter a community property
agreement is in conjunction with one's spouse. Each
party must elect into this agreement and the agreement
provides, most commonly, equal ownership and
management of specific property.
Currently, community property has a significant tax
advantage. When a spouse dies, community property is
placed into a category that allows tax advantages when
that property is sold.
To realize these advantages, appreciation and income
must be characterized as community property.
The default rule has generally been that appreciation
and income on community property will be characterized
as community property, unless otherwise declared in
the community property trust. Trust attorneys have
attested to this interpretation, however recent court
rulings have created an ambiguous understanding of
this general criterion. This legislation, consistent
with industry understandings of trusts, seeks to
clearly define community property as including
appreciation and income on community property.
SB 11 establishes a clear definition of appreciation
and income as community property, as intended by The
Community Property Trust Act. Portions of this
legislation also have a retroactive effective date of
May 23, 1998.
5:53:05 PM
MR. BAILLY next paraphrased from the sectional analysis, which
read [original punctuation provided]:
Section 1. Clarifies intent of subsection (h) under AS
34.77.030 to ensure any financial gains directly
related to appreciation of community property trusts
are treated as community property unless legal trust
documents clearly state otherwise.
Section 2. Adds a new subsection under AS 34.77.030 to
retroactively apply the above changes in statute to
community property trust agreements established on or
after May 23, 1998. This section also applies an
existing statutory definition of "community property
trust."
Section 3. Adds as a new uncodified law of the State
of Alaska to ensure above changes do not impact court
actions or proceedings that began before Section 1 of
this Act takes effect.
Section 4. Establishes a retroactivity date of Section
1 of this Act as May 23, 1998.
Section 5. States Section 1 and Section are
immediately effective upon passage of this
legislation.
5:54:20 PM
CO-CHAIR SPOHNHOLZ shared her understanding that the bill as
written would not nullify previously taken court action, but it
would allow currently existing community property trusts to have
that appreciation incorporated into the value moving forward.
SENATOR BEGICH confirmed that that understanding is correct.
5:54:52 PM
REPRESENTATIVE MCCARTY drew attention to the sponsor statement,
first paragraph, fourth line, which states that residents and
nonresidents can enter Alaska community property trusts. He
inquired about how far reaching the ability is for nonresidents
to be involved in this.
SENATOR BEGICH replied that that has been allowed under the law
since 1998. He recounted that Representative Ryan talked about
there being 41 states (at that time) that were not mandatory
community property states. Those 41 states have had the ability
to take advantage of Alaska's laws since passage of the original
[Community Property Trust Act], otherwise Alaska would probably
be in violation of the commerce clause of the federal
constitution. So, residents and nonresidents are mentioned
because the community property trusts are open. Senator Begich
pointed out that this leads to an enhanced ability for people
who don't live in Alaska to take advantage of the state's
community property trust law, which increases income into Alaska
and provides some support for the banking systems in the state.
It makes Alaska an attractive place to enter a community trust
if someone wishes, so CSSB 11(JUD) creates an incentive. Not
having this bill in place, and having the ambiguity, acts as a
disincentive so that people are disinclined to come to Alaska to
start their community trust if they choose to have one.
5:57:08 PM
REPRESENTATIVE SCHRAGE requested an explanation of the effective
date.
SENATOR BEGICH responded that there are two effective dates in
the bill. The first effective date, which is Section 4, is the
retroactivity clause that is an effective date. The second only
deals with Sections 1 and 4 of the Act to ensure that the
retroactivity becomes effective on passage of the effective
date. A trigger must be had to make the retroactivity become
effective; in Section 1 an effective date is not needed for the
other two, so just Sections 1 and 4 are immediate.
REPRESENTATIVE SCHRAGE asked why beginning in 1998.
SENATOR BEGICH answered that that's the date when the law became
effective immediately.
5:58:47 PM
SENATOR BEGICH noted that Linda Hulbert, an invited testifier
who may or may not be online, has a financial relationship in a
trust relationship with a member of his staff. He stated that
has had no impact and is not it a reason why this legislation
was considered.
CO-CHAIR SPOHNHOLZ responded that Ms. Hulbert is not online.
CO-CHAIR SPOHNHOLZ [opened invited testimony on CSSB 11(JUD)].
5:59:30 PM
MATTHEW BLATTMACHR, President and CEO, Peak Trust Company,
provided invited testimony in support of CSSB 11(JUD). He said
he personally supports the bill, as does Peak Trust Company. He
said thousands of Alaskans, if not tens of thousands, have
utilized this provision in Alaska statutes for the last 25
years. The intent of all those plans was that accumulation of
income and appreciation would be included in community property.
This bill corrects an error and gets things back to what was
originally intended.
6:00:59 PM
ABIGAIL O'CONNOR, Attorney, O'Connor Law LLC, Alaska Trust &
Estate Professionals Inc. (ATEP), provided invited testimony in
support of CSSB 11(JUD). She said she represents numerous
clients in Alaska who have community property trusts. Having
appreciation and income also be community property, she
continued, is a critical element of the whole community property
structure and planning, without it there is not much point to
doing it. It is critical that appreciation and income also be
community property. She said she supports CSSB 11(JUD) because
going forward trusts can be written to include this language;
however, given the court ruling, trusts created prior to this
time may not have that language and the bill solves that problem
for those Alaskans.
6:02:45 PM
CO-CHAIR SPOHNHOLZ [held over CSSB 11(JUD)].
6:03:27 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
6:03 p.m.